Thai Airways to issue 1 billion new shares

Sep 3, 2010, 10:28 GMT

Bangkok - Thai Airways International Pcl on Friday announced plans to issue 1 billion new shares to raise an estimated 484 million dollars for plane purchases and other improvements.

The public offering is to be made on September 16 and 17 at Bangkok Bank and Krung Thai Bank branches nationwide.

'I expect we will raise about 15 billion baht (484 million dollars),' company president Piyasvasti Amranand said.

Thai Airways was to remain a majority state-owned company with the Finance Ministry holding 51.03-per-cent equity in the national airline.

The extra capital would 'increase financial strength and flexibility, improve competitiveness of our fleet by executing comprehensive re-fleeting and aircraft retrofit programme,' Piyasvasti said.

'We aspire to be one of the top three airlines in Asia and top five in the world,' he added.

The airline experienced its first loss in 2008, losing 20 billion baht in a year in which the world aviation industry was hard hit by high oil prices and the onset of the global financial crisis.

The company was back in the black last year, and reported a profit of 12.3 billion baht in the first half of this one.

But it is saddled with a debt of close to 38 billion baht, making a public share offering necessary, Piyasvasti said. Last month the company signed an agreement with Airbus SAS to purchase seven A330-300 aircraft over the next couple of years.

In an effort to compete with low-cost airlines such as Air Asia, Thai Airways last month announced plans to set up Thai Tiger as a joint venture with Singapore's Tiger Airways.

The new low-cost airline will be launched in the first quarter of 2011. 'With Thai Tiger we are going to regain some of the market share we've lost,' Piyasvasti said.

Low-cost airlines claim 17 per cent of the market in Asia, up from around 2 per cent when they first appeared in the region around a decade ago.